Question

The expression 10,785(1.0275)x represents the amount of money in an investment account with interest that compounds annually for x years. Interpret the meaning of the expression.
A.

The initial investment is $10,275, and the growth rate of the investment is 1.0785%.

B.

The initial investment is $10,275, and the growth rate of the investment is 7.85%.

C.

The initial investment is $10,785, and the growth rate of the investment is 1.0275%.

D.

The initial investment is $10,785, and the growth rate of the investment is 0.0275%.

E.

The initial investment is $10,785, and the growth rate of the investment is 2.75%.

Answer 1

E

According to the question,

The amount of investment money is $10,785 and the rate of interest is 1.0275%. The amount of money will be multiplied with the rate of interest and the year.

To get future value of the investment it will be like

FV = PV(1+i)x

Therefore , Future value = 10,785(1.0275)x

Answer 2

Answer:

The answer is E, initial investment $10785. Growth rate 2.75%

Explanation:

Right on